Later in 1935, he was appointed special prosecutor for a grand jury investigation of vice and reacketeering in New York City. In this assignment, which he completed in 1937, and in his next assignment, he gained national prominence as a crusading prosecutor.

Although Dewey was a Republican, Herbert H. Lehman, Democratic governor of New York, appointed him special prosecutor to root out racketeering in 1935. In 1937 he was elected district attorney of New York county. His successful prosecution of the criminal syndicate Murder, Inc., brought him national fame.

In 1938 he ran for governor of New York against Lehman but lost. Two years later he made an unsuccessful bid for the Republican presidential nomination. But in 1942 he was elected governor, and he won reelection in 1946 and 1950.

As governor, Dewey exercised firm control over the legislature and gave the state an efficient, businesslike administration. Among his leading achievements were a large-scale highway building program, the first state law anywhere against racial or religious discrimination in employment, improved unemployment and disability benefits, and an effective labor mediation board. His record was sufficiently progressive to keep the Democrats on the defensive, while his skill in handling patronage and his fiscal conservatism prevented any potential Republican split.

In 1944, Dewey had won the Republican presidential nomination but was defeated by President Franklin D. Roosevelt. Defeated, he was nominated to run for the presidency in 1948 this time against President Harry Truman. Unexpectedly, he suffered another defeat, against all predictions at the polls; the wide lead given him by the public opinion polls led to fatal over-confidence. His own lackluster campaign, Democratic President Harry S. Trumans's attacks on the "do-nothing" Republican 80th Congress, and the country's prosperity gave Truman an upset victory.